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Tag: Lightning Network

We have previously covered the Trust and Saturn cryptocurrency wallets for handling BitUnits, but this article will cover the Eclair lightning network wallet.

Watch how the Eclair wallet is used at Brisbane airport to buy a coffee in the video below. More and more merchants are adopting the lightning network for “micropayments” with some not accepting any other form of payment. This makes it important for you to have a basic understanding of how to set up the Elcair wallet.

We are not going to go into great detail about the lightning network but what we will say is that it is likely to become more important than the Bitcoin blockchain network. The lightning network (LN) is a second layer network primarily used to prevent the Bitcoin blockchain getting to an unmanageable size. Today it’s around 200 GB, and that is duplicated across thousands of full nodes around the world.

As crypto payments become more and more popular, we are going to use a “temporary” record for most of the transactions. This temporary network is much faster and cheaper than the full Bitcoin blockchain network. It can take several hours for a Bitcoin transaction to be confirmed whereas a lightning network transaction is processed within seconds.

If you go into a coffee shop to buy an Espresso, the shop owner can’t wait hours to decide if you have enough Satoshis to pay for the drink. So you need a wallet which works with the lightning network. For Android users, we recommend the Eclair wallet by Acinq.

The screenshot above is my Eclair wallet paying a 2 cent invoice which I raised via the Zap desktop lightning wallet. Taking a closer look at the wallet and ignoring the actual payment we see a wallet balance of $25.71 with $13.04 in Bitcoin and $12.67 allocated to the lightning network.

Eclair Lightning Network Wallet

The Eclair wallet can be used as a regular Bitcoin wallet, but there are far better wallets available if you are not using the lightning network. Currently, you can fund channels on the lighting network with a minimum of 0.001 BTC and a maximum of just under 0.043 BTC. With BTC trading around $6,300, that’s $6.30 to $270. So if your local coffee shop has adopted the lightning network you might open a channel for $6.30 (0.001 BTC). The $12.67 shown in my wallet for lightning channels was two channels, each with 0.001 BTC. With some merchants, you might have to open a channel directly with them but as the network expands an open channel with a major node should allow you to pay most merchants.

With Eclair the process is to send an on-chain (regular Bitcoin blockchain transaction) balance of BTC to the address shown in your wallet. Remembering it will need to be at least 0.001 BTC after network costs, so perhaps 0.0011 BTC. When you add a channel with Eclair it asks if you want the on-chain transfer to be completed fast (approx 20 minutes), medium (2 hours) or slow (12 hours). The network fees will be higher the faster you want it processing but note the quickest is 20 minutes. This means you should be funding the channels ahead of spending the Bitcoin you allocate to the channel.

If you open a 0.001 BTC channel directly with the coffee shop and use the Elcair wallet to pay for your $3.00 Espresso, you will still have $3.30 for the next time you visit. However you are not paying for your coffees in advance, you are simply putting funds on one side “in the fast lane” for when you need them. You can close a channel in Eclair whenever you want by selecting the channel in the Lightning Channels tab.

As shown in the screenshot above, you will be asked to confirm the channel closure but only select force-close if the merchant’s node is shown as offline. If you force-close a channel, you will have to wait for 144 blocks to be added to the Bitcoin blockchain before the funds become usable on-chain. With each block taking about 10 minutes it means a 24-hour wait whereas a regular channel close will normally be completed within one hour.

We will be covering some great things you can buy with your Eclair lightning network wallet in future articles so be sure to have at least one channel adequately funded.

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